Cell growth, differentiation, and development are driven by fixed patterns of gene expression. Understanding how these normal cellular and organismal processes progress, as well as their disruption in various disease states, requires knowledge of the regulation of transcription in mammalian cells. All cellular genes are regulated within a chromatin context, and it has long been appreciated that chromatin plays a central role in determining the activation state of a gene. Condensed chromatin is known to inhibit both the initiation and elongation of transcription by RNA polymerases. Induction of gene expression therefore often requires remodelling of the chromatin to a more extended configuration, so that it becomes accessible both to specific DNA-binding proteins and to the general transcription machinery. Both initiation and elongation must be facilitated in the active chromatin state in order to efficiently express a gene. Recently, specific proteins or complexes of proteins have been identified that have the capability to alter chromatin structure. In particular, we and others have shown that the highly conserved HMG-14/-17 family of proteins can both alter higher order chromatin structure and facilitate transcription by RNA polymerases II and III. The proposed studies will investigate the biochemical and biological mechanisms whereby HMG-14 activates transcription. First, we will identify which alterations in chromatin structure result in transcriptional induction by HMG-14, by determining whether the transcriptional activation region of HMG-14 alters histone H1-chromatin interactions or whether the binding of transcriptionally active HMG-14 changes the conformation or enhances the mobility of nucleosomes. Second, the mechanism by which HMG-14 may target specific genes for activation will be explored by determining whether HMG-14 activities are influenced by core histone acetylation, and whether specific interaction of HMG-14 with DNA-binding transcription factors may facilitate activation of particular genes. Together, these studies should define and characterize a novel mechanism for mediating transcriptional induction by reconfiguring the structure of chromatin at specific genes.